Page 80 - RusRPTAug21

8.0 Financial & capital markets 8.1 Bank sector overview
In June, retail lending continued to grow rapidly, most of all in mortgages (probably due to the desire of people to have time to get soft loans before conditions change of the main program), however, the high rate in consumer loans is not slowing down yet.
In contrast, corporate lending slowed to the 2019 average. On the funding side, there was a decrease in corporate and government funds, which was partially offset by the inflow of household deposits. June profit was quite high, but slightly lower than in May, mainly due to negative currency revaluation against the background of the strengthening of the ruble.
8.1.1 Earnings
The sector's net profit in June amounted to RUB204bn (return on equity - 22% in annual terms), slightly lower than in May (RUB216bn), mainly due to negative currency revaluation against the background of the strengthening of the ruble exchange rate.
In total, in the first half of 2021, banks earned RUB1.2 trillion, which is almost twice the result of the first half of 2020 (RUB630bn), mainly due to growth business and lower expenses on reserves (decrease from RUB729bn to RUB298bn).
The positive influenced by the growth of net interest income (RUB223bn, or 13%), mainly by reducing interest expenses on funds of the population. Net fee and commission income also increased (RUB150bn, or 27%) as a result of an increase in cash and settlement income. servicing corporate clients and from the provision of brokerage services.
Among the negative factors, first of all, an increase in operating expenses (RUB110bn, or 10%) and a twofold decrease in income from revaluation and foreign exchange transactions (from RUB122bn to RUB56bn).
If unforeseen events do not happen, the profit by the end of the year could reach RUB2 trillion or even more. The number of profitable banks increased over the month to 237 from 234. At the same time, the share of banks in assets sector, profitable in the first half of 2021, amounted to 98%, more than 80% of the profit was received by systemically important credit institutions.
80 RUSSIA Country Report August 2021 www.intellinews.com